With thousands of jobs at risk, it’s the government that must answer for Carillion’s mess [OPINION]

The collapse of Carillon, the UK’s second largest construction company, has raised questions. Around 43,000 in fact, since that’s how many jobs are affected by Carillion’s announcement. And I’m placing the blame firmly at the feet of the government.

Of course, the callousness and bullishness of Carillion’s senior management and executive board is blood-boiling. Continuing to bid for £m contracts while shouldering £900m of debt and then asking for a straight bailout is audacious. The government may not have agreed to bail out the company like it did with the banks in 2008, but the taxpayer will still pay. What’s more, the government should have seen this coming and now it needs to answer for this mess.

Start your day with The Canary News Digest

Fresh and fearless; get excellent independent journalism from The Canary, delivered straight to your inbox every morning.

Email Address

First name

Last name

Mobile number (optional)

And of course, there are those 43,000 workers, almost 20,000 of whom are based in the UK. The Official Receiver has been appointed as the liquidator and will continue to pay the salaries, keeping the company’s operations going. The Official Receiver’s costs will be passed on to the taxpayer.

It may have also been good for staff and the fate of the company if they had never received these contracts in the first place. And on the face of it, that’s exactly what the government’s own rules should have told it to do.

The warnings

Carillion issued three profit warnings in the past six months. The first was in July 2017, which triggered the resignation of chief executive Richard Howson. Even after this, the government announced it would award Carillion work on HS2.

But the government’s own guidance indicates it should be conducting financial assessments before procuring services. John Trickett, Labour’s Cabinet Office spokesman, says it’s government policy to label companies “high risk” if they issue a profit warning. So where are the contingency measures?

Whether the government did its due diligence or not is a question that needs answering. There are callsfor an inquiry, and the cost so far to the public shows that it is in the public interest.

The government is responsible for this mess, and now it has to answer.

Since you're here ...

We know you don't need a lecture. You wouldn't be here if you didn't care.
Now, more than ever, we need your help to challenge the rightwing press and hold power to account. Please help us survive and thrive.

This site

This website uses cookies

We, and our partners, set cookies and collect information from your browser to provide you with website content, deliver relevant advertising and understand web audiences. See our privacy policy to learn more about how we manage your data and your rights. See our cookie consent policy to understand how we use cookies and tracking technology. To agree to our use of cookies, click "Accept".